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ACCOUNTING 1202BlackberryCase

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Accounting 1202 Blackberry Case Blackberry is a smartphone company, that like many others, experienced struggles when Apple introduced the iphone into the smartphone market. In this case study, we found some crucial mistakes that the company made, as well as analyzed their financial statements to uncover a little bit more of the story the company tells. The key success factors for competing in the smartphone industry include managing the relationships with device manufacturers, wireless carriers, and end consumers effectively, because with a loose end in triangle for Blackberry could mean detrimental effects to the sales of Blackberry smartphones. For Blackberry to be successful, the carrier’s scale of operation, sales, and brand recognition were crucial. The problem with the Z10 and Q10 smartphones, This study source was downloaded by 100000793680026 from CourseHero.com on 04-02-2021 17:29:50 GMT -05:00 https://www.coursehero.com/file/23334729/BlackberryCase/ This study resource was shared via CourseHero.comwas that the wireless carriers did not want to buy them to sell to their consumers, because the end customers were not demanding them at large enough quantities. This causes a huge missing link needed for success in the smartphone industry, and the two types of smartphones were not responsible in Caldwell’s eyes for the expected turnaround of the company’s poor hardware sales, as they clearly did not sell the expected amount of inventory. Caldwell went straight to the source of a missing link, the wireless carriers, and saw they were incentivizing customers by cutting their prices of Q10 and Z10 to sell to customers, but the original blackberry held its value. The problem for Blackberry, was not effectively spending their research development account, they spent it all on the new touchscreen interface to compete with Apple, without realizing they were completely abandoning their loyal target market who wanted Blackberry for the email and security features. To go forward, Blackberry can compete with companies like Apple, Google and Samsung by improving the operating systems, the could utilize third party operating systems management, an array of applications available, and adjust the absence of the touch screen because it limited the amount of applications that a user of blackberry could use. Also to move forward, the Research and Development originally conducted did not address the target audience that mattered the most to Blackberry, those using the smartphone for its security and email capabilities. Instead, it tried to reach a similar target market of Apple, which attracts a different kind of consumer. When the question is raised as to whether or not an impairment charge is necessary for Blackberry, the answer is that it absolutely is necessary. Without an impairment charge, Blackberry is not showing the true value of their assets. With their assets displayed at their true EXHIBIT 1: CALCULATION OF IMPAIRMENT CHARGE Z10 Estimated cost per unit: $595-$615 Additional costs: $12 No. of Units produced: 1350600 Assuming the cost per unit is $605 [(595+615)/2] + 12 = $617 Inventory Value= No. of units * Cost per unit

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